The TOWS analysis reveals that DD is confronted with the primary threat of having numerous competitors such as Starbucks, McDonald’s, and Krispy Kreme.
The presence of many competitors and low barriers of entry into the coffee and donut industry pose a significant threat to DD’s market share in both coffee and baked foods. Additionally, the increasing price of raw ingredients, such as soybean, poses a threat as DD has recently switched to using a reformulated cooking oil made from soybean to eliminate trans fats in its donuts.
The rise in prices of raw materials may lead to higher operating costs for DD. There is also a growing global concern about health issues as people become more conscious. Nevertheless, this does not pose a major threat to DD since they have eliminated trans fats from their donuts, and donuts are widely accepted as a popular comfort food. Moving on, let’s examine the opportunities.
Asian countries, particularly China, are experiencing an increasing trend in coffee consumption paralleled by a donut frenzy in countries like Singapore, Taiwan, and Malaysia. The acceleration of globalisation has led to a faster flow of information and overall pace of life. Diverse Donuts (DD) has capitalized on this by positioning itself as a convenient option for grabbing a quick beverage or snack.
The younger generation in countries is increasingly accepting western influences. In Taiwan, for instance, young people are willing to wait in line for hours to purchase donuts. The possibility of a recession in the US can be viewed as an opportunity since Americans tend to indulge in inexpensive sugary food to cope with economic problems. What other items priced under six dollars can you share with 12 individuals? However, some Dunkin’s Donuts franchises have received customer reviews pointing out variations in the quality of food, resulting in inconsistent quality throughout the brand. Furthermore, DD’s menu has expanded beyond just donuts, potentially confusing potential customers who assume they solely offer donuts.
Executives at DD are contemplating the removal of the term “Donuts” from their signage while carefully considering the potential consequences. Despite this, DD boasts a strong customer base known as the dunkin’ tribe, who exhibit remarkable loyalty. For these customers, visiting DD is not just a routine but an essential part of their identity, akin to a religious practice. Interestingly, DD was recognized as the top brand in terms of customer loyalty within the coffee and donut sector by the 2007 brand keys Survey.
Dunkin’ Donuts is widely established worldwide with franchises in over 31 countries. Being a subsidiary of Dunkin’ Brands, it is recognized for its robust corporate social responsibility (CSR) reputation.
